Initial investment cost a little hefty? Here is how a low-cost mobile franchise can be worthwhile
Do the five to six-digit initial investment costs of a franchise make you jump back in fright? Never fear - the mobile franchise is here.
Buying a franchise is no small deal – franchises that require a store format can fall comfortably in the six digit range. And that’s just the initial investment, exclusive of on-going costs.
There are more than 79,000 franchises in Australia and the annual sales turnover of the franchising sector is estimated at $144 million.
So are mobile franchises worthwhile?
In simple terms - they can be. Many mobile franchisors offer lower initial investment costs for a flexible business that comes at a lower risk.
Mobile franchises are generally described as those which can be operated using a vehicle in the provision of goods or services. Franchisees can benefit from lower overhead costs but leverage franchise territories.
“A mobile coffee van business costs as little as $50,000 to purchase with the potential of making as much as $150,000 in revenue a year,” says Tracy Eaton, CEO at Remarkable Business.
“Mobile dog washing, accounting, beauty, car servicing and cleaning, computer services as well as food delivery are available more than ever from $6,000 and there’s even a franchise that has drones providing aerial photography and video surveillance services.”
And it’s not just about the cost – potential buyers also looking to work on their timetable.
“People are also chasing flexibility and a desire to be their own boss which is driving a surge in the popularity of mobile franchises,” explains Eaton.
“Existing franchisors are even extending their current business to allow for mobility and tap into the demand from consumers to access services from home.”
Is a mobile franchise for you? Here’s what you need to do
1. Do your due diligence: As with any franchise opportunity, don’t be sold by what the franchisor claims about the business providing flexibility and a high income. Seek advice, check the financials and hire a franchise lawyer to be safe. Be aware of on-going costs required within the term duration.
2. Talk to franchisees: Talking to existing franchisees to gain an insight into the business culture of that franchise to ensure it’s the right fit for you. Ask them about their experiences owning a mobile franchise and what is required to succeed.
3. Ensure the model suits your skills and personality: Running a business is very different from working for someone. Make sure you consider your personality, know your strengths and weaknesses in your selection.
4. Make sure you get along with the franchisor: Entering into a franchise agreement significantly involves the franchisor, so make sure you can see yourself working with this person. They will be your go-to for advice on making the most out of a proven system.
5. Understand what you are after: Identify what you want out of a franchise and select a franchisor based on what you are looking for.